Queensland LNG Ventures Face Hurdles on Land Access, State Says

By Angela Macdonald-Smith

Nov. 25 (Bloomberg) -- Liquefied natural gas ventures planning projects in Australia’s Queensland state face potential conflicts with landowners because of the “intrusive” nature and large scale of the developments, a government official said.

Many inhabitants and farming areas will be affected by the plans to develop coal-seam gas fields, which could cover an 8,000 square kilometer area to supply potential production of 40 million metric tons a year of LNG, Geoff Dickie at Queensland’s Department of Infrastructure, said today at a conference in Brisbane, the state capital.

Developing fields for the extraction of gas from coal seams can require hundreds or thousands of wells located over large areas. ConocoPhillips, Malaysia’s Petroliam Nasional Bhd. and BG Group Plc are among companies that have this year taken stakes in proposed LNG projects in northeastern Australia that would use coal-seam gas.

“It is a different scale of intrusion into a fairly closely farmed area,” Dickie said. “It is a real potential hurdle for the industry.”

Coal-seam gas, mostly comprising methane, bonds as a thin film on the surface of coal and is released when pressure is reduced, usually after water is removed.

Queensland’s coal-seam gas industry currently involves production of about 127 petajoules a year of fuel for the local market. More than 600 wells had been drilled as of June 30, with 22 gigaliters of water extracted, Dickie said.

Should the proposed LNG ventures develop just 10 million tons a year of capacity, production would jump to 609 petajoules a year, requiring about 2,000 wells over a 2,000 square kilometer area.

At 40 million tons a year of LNG, production of coal-seam gas rises to more than 2,400 petajoules a year, requiring more than 5,600 wells over an area of 70 kilometers by 80 kilometers to hold wells, flow lines, compression plants and pipelines, he said.

LNG is gas chilled to liquid form, reducing it to one-six- hundredth of its original volume, for transportation by tanker to destinations not connected by pipeline.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net